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The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September 20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
Suggested Answer: D
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26 comments · newest first
VE
Veronika
11 months ago
ST has 50% of $20k and AB has 50% of $30k in inventory.
PA
Pansy
11 months ago
Don't forget the 20% markup on sales!
HE
Helga
11 months ago
Wait, how did they calculate that? Sounds off.
PE
Penney
12 months ago
I think it's $4,000, seems right to me!
MA
Marisha
12 months ago
The unrealized profit in inventory is based on the remaining goods.
JU
Jules
1 year ago
I feel like the answer could be $2,000, but I’m not entirely confident. I remember something about how to adjust for non-controlling interests, but I’m not sure how it applies here.
SH
Shaniqua
1 year ago
This question reminds me of a similar practice question we did on consolidated financial statements. I think the unrealized profit might be around $4,000, but I need to double-check my calculations.
JO
Jolanda
1 year ago
I’m a bit unsure about the exact calculation. I think we might need to consider the mark-up and the percentage of goods left in inventory, but I can't recall the exact steps.
CE
Celestine
1 year ago
I remember we discussed unrealized profits in inventory during our revision sessions. I think we need to calculate the profit on the goods still in inventory.
AH
Ahmed
1 year ago
This is a tricky one, but I feel confident I can work through it step-by-step. The key will be breaking it down into manageable parts.
AL
Alberto
1 year ago
Okay, I think I've got a handle on the key information. Now it's just a matter of crunching the numbers and applying the right formulas.
OM
Omer
1 year ago
Hmm, I'm a bit confused by the details around the acquisitions and impairments. I'll need to review those closely to make sure I understand the full picture.
CL
Clement
1 year ago
This looks like a consolidation question, so I'll need to carefully track the intercompany transactions and inventory adjustments.
AN
Andree
1 year ago
I'm a bit confused by the wording of the question. Does "EXCEPT" mean I need to find the one statement that is false, or the one that is true? I want to make sure I understand before I start analyzing the options.
LI
Lillian
1 year ago
Hmm, I'm a bit unsure about this one. The question mentions a "limit identifier" called rl_maxrequests, so I'm wondering if that's the key to solving this.
SH
Sherly
1 year ago
This question seems straightforward, but I want to make sure I understand all the requirements correctly before answering.
LA
Launa
1 year ago
Tricky question. I'll have to use my knowledge of hospitalist practices to figure out which statement is accurate. Gotta be careful not to overthink it.
EN
Ena
1 year ago
Alright, let's think this through. The network-admin role is definitely one of the options, as it has broad network management capabilities. The other one is likely the server-profile role, as it can configure server-related policies like LAN Connectivity.
LI
Lizette
2 years ago
I see where Bob is coming from, but I still think the answer is D) $1,667 because the impairment losses on goodwill and investment should be factored into the calculation.
HO
Holley
2 years ago
I disagree with I believe the answer is C) $4,000 because the mark-up of 20% on sales needs to be considered for both ST and AB.
CA
Cammy
2 years ago
I think the answer is A) $3,333 because the unrealized profit in inventory adjustment should cover the remaining goods sold to ST and AB.
FL
Flo
3 years ago
D) $Rikki,667
CI
Ciara
3 years ago
C) $,000
KI
Kimberlie
3 years ago
B) $Kasandra,000
KA
Kasandra
3 years ago
A) $3,333
RI
Rikki
3 years ago
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 3 December 20X0?